Working with a real estate broker isn’t just about visiting houses, signing papers, and waiting for the keys to be handed over. Behind every transaction, there is a set of rules, responsibilities, and above all, a genuine duty to protect clients. Many people don’t realize how much the role of a broker is regulated by law and how much they must act with transparency and loyalty.
In this article, we explore the legal and ethical obligations of a real estate broker, the difference between contractual and extra-contractual liability, and the possible penalties when a broker fails in their duties.
The duties and responsibilities of real estate brokers
A real estate broker is not simply an intermediary between buyers and sellers. They play a fundamental role: protecting the interests of their clients and inspiring public confidence. The law therefore imposes several specific obligations on them.
1. Verify information and be reliable
A broker must always ensure that the information they provide is accurate. Whether it concerns a house, land, or a transaction, they must be able to prove that what they are saying is true. The objective is clear: to enable the client to make a truly informed decision.
2. Protecting their client’s interests
The broker’s main role is to protect and defend their client’s interests. This includes the confidentiality of sensitive information. A broker cannot act against their client’s interests and must never disclose strategic information without written consent. At the same time, they must remain fair and equitable to all other parties involved in the transaction.
To properly protect their client, brokers must identify anything that could harm their client, the other party, or the transaction itself. They have a responsibility to share this information with their client and all parties involved so that everyone understands the risks and can make informed decisions.
3. Act with caution and professionalism
The brokerage profession is based on competence, diligence, and honesty. A broker must avoid any behavior that could damage the reputation of their profession. They are also required to work in a spirit of collaboration and respect towards all parties.
4. Be available and organized
A good broker is always available to their client. In case of absence, they must ensure that a competent person can replace them and that the follow-up of files continues as normal. All communications received must be dealt with, even when they are not on site.
5. Provide clear information and advice
Brokers must clearly explain the services they are committed to providing to their clients so that they fully understand them. They must provide objective advice and information without exaggerating, concealing information, or making false statements. They also have an obligation to propose solutions that will protect their clients’ assets, if necessary.
In short, the broker’s role is not limited to connecting people: they must be a trusted, vigilant, and transparent advisor.
The principle of good faith in Quebec law
In Quebec, good faith is a fundamental principle that governs all contracts. In concrete terms, this means that each party must act honestly and not seek to deceive the other. In real estate brokerage, this principle takes on an essential dimension.
Mandatory disclosure
A broker must always disclose information that they are aware of and that could influence a buyer’s or seller’s decision. For example, if a broker knows that a house has had soil contamination problems in the past, they must mention it, even if it could jeopardize the transaction.
Vitiated consent
When a decision is made on the basis of incomplete or false information, it is considered vitiated consent. In other words, the choice was neither free nor informed. This can lead to the cancellation of a contract or legal recourse.
Fraud: serious deception
When a broker deliberately conceals important information (such as a hidden defect or structural problem), this is referred to as fraud. Fraud automatically voids the contract, as it breaks the trust between the parties. Even if the concealment was not deliberate, failure to disclose known information may result in penalties.
Contractual and extra-contractual liability
In addition to the obligation to act in good faith, brokers also have several responsibilities. This applies in contractual business relationships and in non-contractual relationships.
Contractual liability
This applies when there is a formal contract. For example, when a broker signs a contract with a seller, they undertake to defend their interests and to comply with all their legal and professional obligations.
Non-contractual liability
What about the buyer, who often does not have a direct contract with the broker? This does not mean that the broker has no obligation to them. Even in the absence of a contract, there is non-contractual liability. This obliges the broker to act with caution, honesty, and professionalism towards all parties involved in the transaction.
In other words, whether you are a buyer or a seller, Quebec law protects you. The broker cannot use the absence of a contract to justify negligent or deceptive behavior.
Penalties for breach of duty
Real estate brokers who fail to meet their obligations are subject to disciplinary and financial penalties. Here is a concrete example.
A broker knew that a promise to purchase had been cancelled after an inspection report. The report revealed the presence of vermiculite in the attic and possible soil contamination. Although he did not have the report in his possession, he was aware of these facts. However, he did not disclose them to the subsequent buyers.
As a result, the buyers made a decision without knowing all the risks. This undermined their free and informed consent and the public’s trust in the profession. The broker ultimately received a 30-day suspension and two fines of $3,000 each.
This example clearly illustrates that failure to disclose information can have serious consequences.
In addition to the obligation to disclose, a broker is also required to verify the accuracy of the information they provide. This means that even if they did not intend to mislead and were unaware that the information was incorrect, they may be held liable if the error resulted from a failure to verify.
For example, if they announce that a property has a specific surface area without having validated the official data, and this data proves to be inaccurate, the broker may be penalized. Why? Because their role involves ensuring that the information provided is reliable. The argument “I didn’t know” is not sufficient to absolve them of responsibility.
This clearly demonstrates that the profession is based on a high degree of rigor: an unintentional error does not excuse a breach when it results from a failure to verify.
Conclusion: a role of trust governed by law
Real estate brokerage is much more than a simple financial transaction. It is a field where trust, transparency, and good faith are essential. Brokers have a duty to act in the best interests of their clients, to verify the accuracy of information, and to disclose any information that could influence a decision.
Buyers and sellers should remember that Quebec law offers clear protection, whether through contractual or extra-contractual liability. In the event of a breach, penalties exist to maintain public confidence in the profession. A legal expert in real estate law can help you navigate such cases.
When you choose to work with a broker, you are not just entering into a transaction: you are entrusting your interests to a professional who must comply with a strict legal framework and always act with transparency.
NOTE: This article does not constitute legal advice or legal opinion. It is provided for informational purposes only to help readers better understand certain aspects of the role of real estate brokers. As each situation is unique, we recommend consulting a lawyer or real estate law professional for a personalized assessment of your case.